Categorize this under “here’s another unexpected consequence of sanctions,” marking a new chapter in the complex narrative they initiated.
Luxury Shipbuilder Damen Yachting Takes Legal Action Amidst Russian Oligarch Sanctions
Luxury Shipbuilder Damen Yachting, the largest shipyard in the Netherlands specializing in shadow vessels, military ships, custom superyachts, and dredgers, is taking legal action against the local government due to the 2022 sanctions imposed on Russian oligarchs, citing a loss of profits.
Following the invasion of Ukraine by Russian troops in February 2022, several countries in the European Union, the United States, the United Kingdom, and others decided to enforce sanctions against Russian oligarchs. The aim was to halt the cash flow into Russia with the hope of persuading Putin to end the war promptly. This resulted in a series of asset seizures, including luxury items such as superyachts, private jets, automobile fleets, and real estate. Many of these assets remain in a state of uncertainty at present.
In the European Union, sanctions had the consequence of prohibiting shipyards from collaborating with any Russian citizen, irrespective of their presence on a sanctions list. This indirectly affected local businesses without any compensation being provided. Luxury shipbuilder Damen Yachting is particularly concerned about this aspect, as the sanctions led to the termination of contracts, the closure of Russian branches, the cessation of partnerships, and the cancellation of completed project deliveries.
No compensation for damage
Luxury shipbuilder Damen Yachting stands out prominently in the realm of luxury, recognized as one of the most distinguished names. Operating under the Amels brand, it has delivered an impressive array of personalized superyachts, with Here Comes the Sun standing out as a true gem among them. Additionally, through its SeaXplorer and Yacht Support brands, Damen Yachting has been behind the creation of iconic vessels, such as the Dapple shadow vessel, as well as more recent projects like the Pink Shadow and Abeona. Notably, Abeona serves as the support vessel for Jeff Bezos’ renowned Koru, the largest sailing yacht globally.
Luxury Shipbuilder Damen Yachting boasts an extensive portfolio; its reputation is particularly synonymous with opulent indulgences for multimillionaires, particularly in the form of shadow vessels. These vessels navigate the delicate balance between being custom superyachts of the utmost luxury, capable explorers, and versatile floating garages that can serve a myriad of functions, including those of a cutting-edge hospital or laboratory.
As it turned out, and as the world learned through a surge of seizures following the release of the initial sanctions list, most of these wealthy individuals are of Russian oligarch lineage, whether or not they are directly associated with Putin. Due to the Netherlands’ decision that Luxury Shipbuilder Damen Yachting irrespective of sanctions, couldn’t engage in business with them, their operations were abruptly halted.
Notably, luxury shipbuilder Damen Yachting, as mentioned in court documents obtained by a media outlet, contends that what makes the situation particularly egregious is the government’s failure to provide any compensation for the incurred damage. This stands in stark contrast to the support extended to businesses affected by the 2020 global health crisis, a circumstance beyond their control.
The legal action seeks unspecified damages for the loss of profits without specifying the amount Damen believes it has lost. In a released statement, the shipyard asserts its commitment to complying with the sanctions. However, it emphasizes that these sanctions have left them “unable to fulfill several orders.” Furthermore, the statement highlights that the consequences of the sanctions are classified as entrepreneurial risks by the government, and no form of compensation is being offered.
Money has no allegiance
While news of the legal action surfaced earlier this month, the official filing dates back to May of this year, indicating that the legal process is not recent. However, despite the filing occurring several months ago, the earliest possible court hearing is set for next year, suggesting that the resolution of the sanctions dispute is still far from its conclusion. Aside from the previously mentioned information, the shipyard has chosen not to provide additional comments on the ongoing proceedings. The Dutch Ministry of Foreign Affairs has also declined to officially comment on the matter, but there are already unofficial reports circulating that characterize Damen in a highly negative light, portraying the company as driven primarily by financial motives.
According to an insider, the lawsuit reveals that Damen’s moral priorities consistently prioritize the owner’s financial interests, emphasizing the company’s pursuit of monetary gain above all else. This narrative underscores the notion that money holds no allegiance or loyalty in Damen’s business practices.
The legal documents do not specify the exact amount of lost profit, but it is emphasized that the sum in question is substantial. The shipbuilding industry is a highly lucrative sector in the Netherlands, and sanctions have indirectly impacted it by restricting business dealings with Russian citizens. Statistics from the Chamber of Commerce in 2020 indicate the significant financial scale of shipbuilding, with Damen, Feadship, Oceanco, and Heesen collectively generating sales exceeding €1.5 billion ($1.6 million). Even in the face of sanctions, Damen Yachting managed to produce ships valued at €2.5 billion ($2.64 billion) in 2022.